UK Regulator Suing MasterCard for $18.6 Billion Over Excessive Fees

Regularos in the United Kingdom are suing MasterCard for $18.6 billion on behalf of consumers. The suit alleges that the arc issuer charged unlawfully high fees between 1992 and 2008.

This is not the only lawsuit going around in connection with the fees charged by MasterCard and Visa. There is a $6 billion suit in the US on behalf of merchants that is currently under appeal. And back in 2014 the EU courts sanctioned MasterCard for some of the fees it charged.

MasterCard denies the charges raised by UK regulators.

The way the UK system works, a three judge tribunal will decide if the case can go forward. If so, a trial would begin sometime in 2018.

The wheels of justice grind forward slowly. But slowly the high fees charged by the MasterCard and Visa duopoly are coming under pressure.

It is not clear if the long term result will be slightly lower prices to consumers or slightly higher margins for merchants. But one guess is that rewards cards may become a thing of the past.

After all, when Dodd-Frank cut debit card transaction fees, rewards programs were cut immediately. It makes sense the same thing would happen to credit card rewards if the business becomes less lucrative.

Cutting the transaction fees allowed would benefit the consumer in the long run - way more than rewards cards do. And probably drive out a lot of the scuzzy merchant account providers who overcharge small businesses. So it would help them as well.